It costs $1,022 per housing unit from the city’s general fund to provide the current level of police and fire protection in Manteca,
Thanks to a 37-year-old property tax split agreement for annexations that San Joaquin County officials ratcheted up a decade ago to as much as 90 percent for the county and only 10 percent for the city, Manteca is now receiving only $198 a year as its share of the $3,000 annual property tax bill that a home assessed at $300,000 that falls under the agreement. That is only 6.6 percent of the property taxes that homeowner pays.
The county receives $792 in property taxes from that home — or roughly four times what the city does — while the rest goes to schools, community college, and special districts.
It is an arrangement that City Manager Tim Ogden sees as unsustainable and ultimately could lead to the deterioration of services for those paying the property taxes. At the same time the county is seeing a significant jump in taxes as previously undeveloped rural land is urbanized with development without providing any of the day-to-day services new residents require.
Ogden said when he came across the agreement after he was hired he was stunned to find out how it hurt the cities involved, including Manteca, while the county did nothing to provide the day-to-day services for the owners of new homes covered by the deal while siphoning off four times the money than the city would receive.
It is why Ogden is recommending the City Council when they meet tonight at 7 o’clock at the Manteca Civic Center, 1001 W. Center St., give staff the authority to renegotiate the existing property tax sharing agreement seeking a more equitable and sustainable split of 50-50. If the county opts not to budge, staff wants the authority to terminate the agreement that requires a six month notice. If it comes to that, the staff wants approval to work in concert with other cities currently bound by the agreement to get a more equitable and sustainable split in place.
Manteca in the current fiscal year is spending $24.5 million of its $38.9 million general fund budget on police and fire services. With 24,000 housing units in Manteca, that means the cost comes to $1,022 per household. Under the current split the city comes up $824 short for police and fire services. And while the general fund doesn’t use property taxes to cover the entire tab, it is one of the two biggest sources of money the city collects to pay for general fund services. The more generous cut for the county essentially puts the squeeze on the city in its ability to pay for police and fire coverage. County leaders in the past justified increasing the split to the current percentages pointing to the cost of running the welfare system, the county hospital, and the jail among other services.
The county in 2007 threatened the cities it would block annexations unless they agreed to the split formulas that are now in place.
The 90-10 to 80-20 split in the property tax sharing agreement impacting Manteca when they are applied to various development scenarios is considered among the worst in the state — if not the worst — between a county and the cities within its boundaries.
Stanislaus County and Modesto, as an example, have a 50-50 split in place as does Sacramento County and the City of Sacramento, Madera County and the City of Madera, Santa Barbara County and the City of Goleta as well as Yuba County and the City of Wheatland.
An even more favorable split for a city is Sutter County at 45 percent and the City of Live Oak at 55 percent.
Other examples are Fresno County at 66 percent and the City of Kerman at 34 percent as well as Stanislaus County at 70 percent and the City of Newman at 30 percent.
Several scenarios using a mixture of development presented to the council in the staff report shows even at a 50-50 split, the city would still end up being impacted negatively under a split that comes to 83-17 under the agreement.
In another scenario with 2,500 homes and 152,500 square feet of retail of 252 acres, at the current 90-10 split such a mix would dictate the county receives $2,800,592 more than it would if the land hadn’t developed while the city is in the hole $1,266,056 on an annual basis. At a slightly more liberal split of 70-30, the county would be ahead $2,046,955 in a given year and the city in the hole $567,905.
With a 50-50 split, the county would still be ahead $1,371,055 on an annual basis while the city would be moved into plus territory with a net impact of $163,588 to the positive based on what portion of general fund expenses property tax currently covers within the city.
The general fund is used to fund various city services such as police, fire protection, animal services, library, recreation services, street maintenance, and community park maintenance. However, the cost of these services exceeds the miniscule revenue remaining from the current tax share split.